The Computer

January 1, 1997byStacey King

The number of jewelry stores using computers is increasing, and jewelers are discovering endless possibilities for the new technology

In 1960s science-fiction movies, they were monstrous, skulking machines that developed evil minds of their own. In the 1980s, popular films featured them starting war games against the Soviet Union and cloning human beings. Now suspicions about the onslaught of the computer age have come true. Computers have taken over – but it’s been a friendly takeover.

The U.S. had 32.6 million households with personal computers in 1996, and it’s estimated that 75% of all American workers (salary- and wage-earners) will use a computer regularly for their jobs by 2000. The possibilities are endless, as computers have evolved from sensitive, black-and-white machines struggling to run complicated word-processing programs and crunch numbers to lightning-fast supermachines ready to serve a businessperson’s every need: design, video and sound, not to mention user-friendly word processing, database and spreadsheet software galore.

What does this mean to jewelers? First, more jewelers are using them than just a year ago, according to 1995 and 1996 polls of the JCK Retail Jewelers Panel. When JCK did an in-depth report on jewelers’ computer use in 1995 [“The Real Computer Payoff: More Profit,” April 1995], results from our study showed 77% of jewelers used computers in their businesses. The number has now jumped to 85%.

FOR WHAT DO RETAILERS USE THEIR COMPUTERS?

Inventory control

92%

Direct mail lists

91%

Customer lists

89%

Sales data

86%

Receivables/payables

83%

Appraisals/reports

66%

Tags

61%

Order & vendor status

56%

Payroll

51%

Point of sale

45%

Repairs

36%

Bar coding

27%

Store newsletter

14%

Jewelry design

2%

Other

4%

Source: JCK Retail Jewelers Panel, July 1996

Second, store owners are becoming braver in their use of computers. While 76% of owners used a computer in 1995, 83% now use one alongside the accountants or bookkeepers who already used them to keep records.

The increase reflects the fast rate at which the United States is plugging in to the ever-changing world of technology. Jewelers are saying much of the same thing about computerization of their businesses. “The computer is priceless!” says Ron Kaiser of Kaiser Jewelry in Jefferson City, Mo. “Now that everyone has learned to use it, I would not have a store without one.”

Unwrapping the machine and plugging it into the wall is one thing; getting the most out of your computer is another. The following is a brief update on how jewelers are using the latest in technology. Day-to-day business: Most of the jewelers who have introduced computers into the management of their stores have found them extremely valuable in juggling the multitude of business concerns – in other words, they’ve become more organized.

“We buy better and reorder more often,” says Randall Chambers of Chambers Jewelers in Fort Worth, Tex. Computerization has been instrumental in better control of inventory, say many jewelers, because they can easily track the “hot” and not-so-hot items. One jewelers reported that his inventory turnover increased by 50% when he started using a computer.

Computer sales reports also keep the staff on track. “The salespeople can track their volume, margins and transaction count by the day, and know if they need to get in gear,” says Ron Kaiser.

Jewelers use customer databases for instant ideas when selling to regular customers. “We have the ability to quickly tell what a customer already has so we can find the ‘next piece’ to fit her wardrobe,” says Krista Buyck Birchmore of Gudmunason & Buyck Jewelers in Columbia, S.C.

Likewise, customer databases help salespeople to keep track of birthdays and anniversaries so they can call customers or send cards when special occasions approach. Jewelers also use computers to store and print customer mailing lists. And some use desktop publishing programs to create invitations, brochures and advertisements.

Because running a business involves so much behind-the-scenes work, computers are invaluable for “crunching the numbers” so jewelers can concentrate on sales. “The computer makes the time we spend in the store more productive,” says Clayton Bromberg of Underwood Jewelers in Jacksonville, Fla.

A little imagination: “A picture is worth a thousand words,” philosophized a few jewelers when asked to consider the benefits of CAD/CAM systems in their stores. CAD (computer-aided design) allows a designer to print a rendition of jewelry before it’s made; CAM (computer-assisted manufacture) produces a prototype. While only 5% of jewelers say they or their designers now use a computer during the design process, 36% believe CAD/CAM would be a great sales tool.

“Some people have no imagination,” says Charles Ramsey of Bremer C&R Jewelers in Peoria, Ill. “We would like to be able to show the customer beforehand what a piece will look like.”

Other reasons jewelers are intrigued by CAD/CAM:

It’s fast enough to capture the customer’s attention and interest. “CAD would be nice for 3-D color renditions, which take a lot of time to do by hand but help the sale a lot,” says Walter Meier of Chatham Jewelers in Chatham, Mass.

It publicizes a jeweler’s capabilities. One mall jeweler says most people don’t even realize he customizes jewelry and that CAD/CAM would help to communicate that message.

It creates an image for the store. “Today’s consumer is computer literate,” says Randy Wimmer of Wimmers Jewelry in Fargo, N.D.“I believe customers will consider you a state-of-the-art type of store, and this technology will reflect positively on you and your business.”

So why don’t more jewelers use computer hardware and software? It’s expensive, say some jewelers. There is no CAD software created specifically for jewelers, so most off-the-shelf software will work, but levels of software vary from beginning and basic to the advanced programs used by manufacturers. Prices start from $300 for very basic packages, but can exceed $20,000 for very advanced software. (The more advanced the software, the bigger and faster the computer needs to be.) If they wish to create a plastic or metal prototype of the proposed piece, jewelers must be prepared to pay $20,000 to more than $55,000 for a CAM system.

Cost aside, other jewelers believe computerization would strip the uniqueness and creativity from the design process. They prefer to use their own imaginations and artistic abilities to design a piece and communicate that design to a customer. Furthermore, echoing a frequent complaint about computers in general, some jewelers see the computer as an impersonal tool. “A CAD program would interrupt the relationship being developed between the customer and designer,” says Eve Alfillé of Eve Alfillé Ltd. in Evanston, Ill. Making a simple drawing and using existing samples allows more interaction with and input from the customer than sitting behind a computer screen, she says.

HOW DO YOU USE THE INTERNET?

Gem price quotes

38%

E-mail other jewelers or view their Web sites

35%

E-mail customers

27%

General business news, upcoming events & shows

23%

Price quotes on metals, news on industry issues

19%

Product information, e-mail suppliers

15%

Compare prices, locate suppliers

12%

Other

8%

Source: JCK Retail Jewelers Panel, July 1996

Traveling the information superhighway: If technology is changing faster than you can keep up, the Internet will make your head spin. Rough estimates state that the World Wide Web continues to double in size every 53 days, and numbers of people surfing the ’Net have officially reached more than 35 million. However, while it is estimated that only one out of 10 Americans uses the Internet so far, jewelers are ahead by leaps and bounds: the JCK Retail Panel revealed that 23% of respondants are using the Internet to do business.

According to the JCK Panel, only 7% of jewelers have their own Web pages. Even so, the jewelry industry is “up and running” on the Web, and there are countless resources for jewelers to do business on-line. In a session on the World Wide Web, a jeweler can sell a diamond or gemstone, buy diamonds from an exchange market or directly from an on-line wholesaler, read what’s new with international jewelry organizations, chat or read bulletin board postings from other jewelers on industry issues, peruse other jewelers’ sites for ideas of what the competition is doing, educate consumers about jewelry and advertise services and product lines.

JCK is one of the newest industry members to join the Web on Polygon, the trade-restricted network of jewelers and organizations, at http://jck.polygon.net. As the site progresses, JCK will begin a regular review of the industry’s “cool sites.” To tide readers over, here is a very brief sampling of how jewelers are using the Web. (To search the Web more thoroughly, access the Yahoo! search engine at www. yahoo.com and type “jewelry” in the search box; the results will provide you with dozens of on-line wholesalers, networks, organizations and retailers.)